11. SERGUEI NETESSINE
Information acquired: 2025
SERGUEI NETESSINE is an academic who published a paper in 2004 entitled Can We All Get Along? Incentive Contracts to Bridge the Marketing and Operations Divide. SERGUEI NETESSINE published this work as part of a team: Kinshuk Jerath. Here is a description of this work: The,,marketing and operations management arms in a firm must work in coordination â€" marketing efforts to create demand go to waste if supply is suboptimal, and vice versa. However, achieving this coordination has remained a long-standing problem, because in most firms these units are managed in a decentralized manner. A major source of conflict is that marketing compensation is usually heavily weighted towards sales whereas operations compensation is usually heavily weighted towards expense reduction. In this paper, we invoke agency theory to determine compensation plans for sales and operations managers to coordinate their activities in the best interests of the firm. We first show in a single product scenario that, by rewarding the sales manager for increasing sales and the operations manager for reducing total cost, a firm cannot coord.